10.  The second applicant company is the registered owner of a plot of 23 ha of agricultural land in Berkshire. The first applicant company acquired the land by a series of transactions between 1975 and 1977 and owned it until April 1986, when it transferred the land to the second applicant company subject to an option to repurchase. The owners of a property adjacent to the land, Mr and Mrs Graham (“the Grahams”) occupied the land under a grazing agreement until 31 December 1983. On 30 December 1983 a chartered surveyor acting for the applicant companies wrote to the Grahams noting that the grazing agreement was about to expire and requiring them to vacate the land. In January 1984 the applicant companies refused a request for a further grazing agreement for 1984 because they anticipated seeking planning permission for the development of all or part of the land and considered that continued grazing might damage the prospects of obtaining such permission.
11.  Notwithstanding the requirement to vacate the land at the expiry of the 1983 agreement, the Grahams remained in occupation at all times, continuing to use it for grazing. No request to vacate the land or to pay for the grazing which was taking place was made. If it had been, the evidence was that the Grahams would happily have paid.
12.  In June 1984 an agreement was reached whereby the applicant companies agreed to sell to the Grahams the standing crop of grass on the land for 1,100 pounds sterling (GBP). The cut was completed by 31 August 1984. In December 1984 an inquiry was made of the applicant companies as to whether the Grahams could take another cut of hay or be granted a further grazing agreement. No reply to this letter or to subsequent letters sent in May 1985 was received from the applicant companies and thereafter the Grahams made no further attempt to contact the applicant companies. From September 1984 onwards until 1999 the Grahams continued to use the whole of the disputed land for farming without the permission of the applicant companies.
13.  In 1997 Mr Graham registered cautions at the Land Registry against the applicant companies’ title on the ground that he had obtained title by adverse possession.
14.  On 30 April 1998 the applicant companies issued an originating summons in the High Court seeking cancellation of the cautions. On 20 January 1999 the applicant companies issued further proceedings seeking possession of the disputed land.
15.  The Grahams challenged the applicant companies’ claims under the Limitation Act 1980 (“the 1980 Act”), which provides that a person cannot bring an action to recover any land after the expiration of twelve years of adverse possession by another. They also relied on the Land Registration Act 1925, which applied at the relevant time and which provided that, after the expiry of the twelve-year period, the registered proprietor was deemed to hold the land in trust for the squatter.
16.  Judgment was given in favour of the Grahams on 4 February 2000 ([2000] Ch 676). Mr Justice Neuberger held that since the Grahams had enjoyed factual possession of the land from January 1984, and adverse possession took effect from September 1984, the applicant companies’ title was extinguished pursuant to the 1980 Act, and the Grahams were entitled to be registered as proprietors of the land. At the conclusion of his thirty-page judgment, Neuberger J remarked that the result he had reached did not accord with justice and could not be justified by practical considerations: the justification advanced for the right to acquire title to land by adverse possession – namely the avoidance of uncertainty – had in his view little relevance to the use of registered land where the owner was readily identifiable by inspecting the register of the relevant title at the Land Registry. The fact that an owner who had sat on his rights for twelve years should be deprived of the land was in his view “illogical and disproportionate”.
17.  The applicant companies appealed and on 6 February 2001 the Court of Appeal reversed the High Court decision on the ground that the Grahams did not have the necessary intention to possess the land, and the applicant companies were therefore not “dispossessed” of it within the meaning of the 1980 Act ([2001] EWCA Civ 117, [2001] Ch 804). Although this conclusion was sufficient to dispose of the appeal, two members of the Court of Appeal went on to address the question whether the applicant companies’ loss of title to the land could also have given rise to a violation of Article 1 of Protocol No. 1 as applied in domestic law by the Human Rights Act 1998.
18.  Lord Justice Mummery, giving the judgment of the court, held that Article 1 of Protocol No. 1 did not impinge on the relevant provisions of the Limitation Act 1980, which did not deprive a person of his possessions or interfere with his peaceful enjoyment of them but only deprived a person of his right of access to the courts for the purpose of recovering property if he had delayed the institution of his legal proceedings for twelve years or more after being dispossessed by another. The extinction of the applicant companies’ title was not, in his view, a deprivation of possessions nor a confiscatory measure for which payment of compensation would be appropriate, but simply a logical and pragmatic consequence of the barring of the right to bring an action after the expiration of the limitation period. In the alternative, Mummery LJ found that any deprivation was justified in the public interest, the conditions laid down in the 1980 Act being reasonably required to avoid the risk of injustice in the adjudication of stale claims and as ensuring certainty of title: those conditions were not disproportionate, the period of twelve years being reasonable and not imposing an excessively difficult burden on the landowner.
19.  Lord Justice Keene took as his starting-point that limitation periods were in principle not incompatible with the Convention and that the process whereby a person would be barred from enforcing rights by the passage of time was clearly acknowledged by the Convention. This position obtained, in his view, even though limitation periods both limited the right of access to the courts and in some circumstances had the effect of depriving persons of property rights, whether real or personal, or of damages: there was thus nothing inherently incompatible as between the 1980 Act and Article 1 of Protocol No. 1.
20.  The Grahams appealed to the House of Lords, which, on 4 July 2002, allowed their appeal and restored the order of the High Court ([2002] UKHL 30, [2002] 3 All ER 865). Lord Browne-Wilkinson, with whom Lord Mackay of Clashfern and Lord Hutton agreed, held that the Grahams did have “possession” of the land in the ordinary sense of the word, and therefore the applicant companies had been “dispossessed” of it within the meaning of the 1980 Act. There was no inconsistency between a squatter being willing to pay the paper owner if asked and his being in possession in the meantime. Concluding, Lord Browne-Wilkinson held as follows:
“... Despite Pye’s notification to quit the land in December 1983, its peremptory refusal of a further grazing licence in 1984 and the totally ignored later requests for a grazing licence, after 31 December 1983 the Grahams stayed in occupation of the disputed land using it for what purposes they thought fit. Some of those purposes (i.e., the grazing) would have fallen within a hypothetical grazing agreement. But the rest are only consistent with an intention, verified by Mr Michael Graham, to use the land as they thought best. That approach was adopted from the outset. In my judgment, when the Grahams remained in factual possession of the fully enclosed land after the expiry of the mowing licence they manifestly intended to assert their possession against Pye.
... Before your Lordships’ House, it was conceded that the Human Rights Act [incorporating the European Convention on Human Rights] did not have a retrospective effect. But Pye submitted that, even under the common-law principles of construction applicable before the Human Rights Act came into effect, the court should seek to apply the law so as to make it consistent with the [Convention]. Any such old principle of construction only applied where there was an ambiguity in the language of a statute. No such ambiguity in the Act of 1980 was demonstrated to your Lordships.”
21.  Lord Bingham of Cornhill, agreeing with Lord Browne-Wilkinson, made the following statement in the course of his judgment:
“The Grahams have acted honourably throughout. They sought rights to graze or cut grass on the land after the summer of 1984, and were quite prepared to pay. When Pye failed to respond they did what any other farmer in their position would have done: they continued to farm the land. They were not at fault. But the result of Pye’s inaction was that they enjoyed the full use of the land without payment for 12 years. As if that were not gain enough, they are then rewarded by obtaining title to this considerable area of valuable land without any obligation to compensate the former owner in any way at all. In the case of unregistered land, and in the days before registration became the norm, such a result could no doubt be justified as avoiding protracted uncertainty where the title to land lay. But where land is registered it is difficult to see any justification for a legal rule which compels such an apparently unjust result, and even harder to see why the party gaining title should not be required to pay some compensation at least to the party losing it. It is reassuring to learn that the Land Registration Act 2002 has addressed the risk that a registered owner may lose his title through inadvertence. But the main provisions of that Act have not yet been brought into effect, and even if they had it would not assist Pye, whose title had been lost before the passing of the Act. While I am satisfied that the appeal must be allowed for the reasons given by my noble and learned friend, this is a conclusion which I (like the judge [Neuberger J] ...) ‘arrive at with no enthusiasm’.” (JA Pye (Oxford) Ltd and Others v. Graham and Another [2002] 3 All ER 865, at 867)
22.  As noted above, the question whether the result was incompatible with the applicant companies’ rights under Article 1 of Protocol No. 1 was not pursued before the House of Lords. However, in his judgment Lord Hope of Craighead, who also agreed with Lord Browne-Wilkinson on the reasons for dismissing the appeal, observed that the question under the Convention
“... is not an easy one, as one might have expected the law – in the context of a statutory regime where compensation is not available – to lean in favour of the protection of a registered proprietor against the actions of persons who cannot show a competing title on the register. Fortunately ... a much more rigorous regime has now been enacted in Schedule 6 to the Land Registration Act 2002. Its effect will be to make it much harder for a squatter who is in possession of registered land to obtain a title to it against the wishes of the proprietor. The unfairness in the old regime which this case has demonstrated lies not in the absence of compensation, although that is an important factor, but in the lack of safeguards against oversight or inadvertence on the part of the registered proprietor.”
23.  The value of the land in issue is disputed between the parties. The applicant companies put their pecuniary loss at over GBP 10 million. The Government put the value of the land in 1996 (when the twelve-year limitation period expired) at GBP 785,000, and in July 2002 (when the House of Lords judgment was delivered) at GBP 2.5 million.